YC, good VCs, etc, aren't capital constrained, and do a ton of work to get their dealflow. So wishing that you could invest pro-rata alongside them with no fees is like wishing that ice cream were free :)
My apologies for being unclear. Pro-rata would apply primarily to angel groups that simply wanted to increase their attractiveness to entrepreneurs, by getting the ability to (very easily) multiply their financial firepower.
For VCs, I'm suggesting investing as an LP, and paying management and performance fees.
As it stands, the asset class is completely inaccessible to most retail investors. Even for HNWIs and institutions, it's difficult to build a reasonably diversified portfolio.
I feel as though with some work, the model could provide value to all participants.
- Startups get a broader range of individuals who care about their success
- Angel Groups effectively get more power.
- VCs get an LP whose whole business is structured around new venture investment, so sales and management would likely be simpler than with LPs that might be more fickle depending on who's running finance and treasury, and what else has happened to their endowment in the past twelve months.
- Retail investors and institutions get to buy a portion of the market that's currently inaccessible, which should provide a better overall allocation of funds.
